Asked by Erica Cluff on Jul 14, 2024
Verified
Minimal cash balances are associated with a restrictive short-term financial policy.
Minimal Cash Balances
Minimal Cash Balances represent the smallest amount of cash that a business needs to keep on hand to meet its immediate payment obligations and avoid liquidity issues.
Restrictive Policy
A policy designed to limit or control certain actions, often used in the context of financial lending where certain covenants restrict borrower behavior.
- Understand the consequences of immediate financial policies on an organization's operational effectiveness and liquidity.
- Discern between tight and adaptable short-term financial policies.
- Master the fundamentals of short-term financing and the application of marketable securities.
Verified Answer
Learning Objectives
- Understand the consequences of immediate financial policies on an organization's operational effectiveness and liquidity.
- Discern between tight and adaptable short-term financial policies.
- Master the fundamentals of short-term financing and the application of marketable securities.
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